“Competing with Capitalism to Maximize Well-Being” LEDDA framework on Thruth Out

It's not that the benefits of capitalism are undesirable - jumbo jets and smart phones are sheer wonders - it's that the collateral damage is growing untenable. Democracy and the commons are being sold off to the highest bidders.

— Lorenzo Fioramonti and John Boik

What would you do to reinvent capitalism, to make it less destructive and more focused on what people really need?
It’s not that the benefits of capitalism are undesirable – jumbo jets and smart phones are sheer wonders – it’s that the collateral damage is growing untenable. Democracy and the commons are being sold off to the highest bidders.

In effect, the framework offers a secondary level of organization on top of an existing local economy.

Each LEDDA governs its own local framework through an online process of direct democracy, and all LEDDAs are networked together within a global association, which is also governed through online direct democracy. Thus the focus is both local and global.

The LEDDA framework integrates and builds on numerous initiatives already existing in cities and regions around the world, including buy local, local currency, open source, crowdfunding, socially responsible business, open data, smart cities, and participatory democracy. It contains its own monetary system, which issues a local electronic currency, called the token. And it has its own financial system, called the Crowd-Based Financial System (CBFS), which resembles crowdfunding and participatory budgeting. The framework is sophisticated, and there are many more elements.

The LEDDA framework is synonymous with LEDDA economic direct democracy, an economic system that offers all participants roughly equal and direct opportunity to influence their local economy. The framework infuses a local economy with democracy, in part by using money as a voting tool and by increasing and equalizing family incomes.

A computer simulation model has been published that illustrates the process. Inflation-adjusted mean family income more than doubles during the twenty-eight-year simulation period. As incomes rise, they become more equal. By the end of the simulation, every member family receives a pre-tax, take-home income equivalent to about $107,000, just above the 90th percentile of baseline income. Even very wealthy families would see a small direct gain.

By the end of the simulation, the LEDDA, located in an averaged-size US county, channels the equivalent of more than $2 billion dollars annually toward local businesses, schools, public services, and nonprofit organizations. Tax revenues for the county markedly rise. With such abundant resources, and democratic control over funding decisions, a community could remake its economy into one that best suits its needs.

The LEDDA framework is still theoretical, and the partnership is just forming. Over time, we hope to provide answers to the host of questions that such an approach naturally raises. In this, we invite your participation.

Imagine a democracy-infused economic system that maximizes well-being. The long-run social and environmental returns might be valued in the trillions, thousands of times greater than the costs of development and pilot trials. Isn’t it worth the effort?